2015 (10) TMI 2451 - AT - Central Excise

Waiver of pre deposit - Section 35F - Mandatory pre deposit - Held that - Appeal and stay application were not pending before the Tribunal prior to the amendment of Section 35F of the Act. It is also noted that in the present case, the impugned order was passed after amendment. The only stand of the Learned Counsel of the applicant is that the Show Cause Notice was issued prior to amendment and therefore, they are not covered by the amended section the 35F of the Act. - there is a clear direction of the legislature that the Tribunal shall not entertain any appeal unless the appellant has deposited the amount as specified therein in respect of appeal filed after amendment. In our considered view, the applicant is required to furnish the evidence of the mandatory deposit as required under amended section 35F of the Act. - merit in the application filed by the applicant. However, considering the facts and circumstances of the case, we direct the applicant to furnish proof of mandatory as required under Section 35F as amended by the Act, within two weeks from today to the Registry of this Tribunal. Otherwise, the Registry is directed to return the appeal as the Tribunal has no power to entertain the appeal. - in view of the amendment of the Section 35F of the Act, the Stay application is not maintainable. - Decided against assessee.

Summary

Issues:
Appeal acceptance without mandatory deposit under Section 35F of Central Excise Act; Interpretation of amended Section 35F; Applicability of mandatory deposit requirement to appeals filed after amendment; Pre-existing right of appeal vs. retrospective amendment; Relevant case laws and their applicability; Stay application under Section 35F.

Issue 1: Appeal acceptance without mandatory deposit under Section 35F of Central Excise Act

The applicant sought direction for the Registry to accept their appeal without furnishing mandatory deposit under Section 35F of the Central Excise Act, as amended on 6th August, 2014. The appeal was against an order passed by the Commissioner of Central Excise and Service Tax. The main contention was that since the Show Cause Notice was issued before the amendment of Section 35F, the mandatory deposit was not required. The applicant relied on legal precedents to support this argument.

Issue 2: Interpretation of amended Section 35F

The Tribunal analyzed the amended Section 35F, which mandates a deposit before entertaining an appeal. The provision specifies different percentages of duty or penalty to be deposited based on the nature of the dispute. The Tribunal highlighted that the second proviso exempts stay applications and appeals pending before any appellate authority prior to the amendment from the mandatory deposit requirement.

Issue 3: Applicability of mandatory deposit requirement to appeals filed after amendment

The Tribunal emphasized that the legislative direction is clear that no appeal shall be entertained unless the appellant has deposited the specified amount post-amendment. It was noted that the appeal and stay application in this case were not pending before the Tribunal before the amendment of Section 35F. Therefore, the Tribunal held that evidence of mandatory deposit was required as per the amended section.

Issue 4: Pre-existing right of appeal vs. retrospective amendment

The Tribunal addressed the argument regarding the pre-existing right of appeal and the retrospective nature of the amendment. Citing the impugned order being passed after the amendment, the Tribunal concluded that no right of appeal had accrued before the amendment. Therefore, the case law supporting the preservation of pre-existing appeal rights did not apply in this scenario.

Issue 5: Relevant case laws and their applicability

The Tribunal evaluated various case laws cited by both parties. It differentiated the circumstances of each case from the present situation, emphasizing that the legal precedents were not directly applicable. The Tribunal specifically highlighted the decision in a case where the Kerala High Court granted interim relief challenging the constitutional validity of the amended Section 35F, clarifying that such relief was not universally applicable.

Issue 6: Stay application under Section 35F

The Tribunal ruled that the stay application was not maintainable due to the amendment of Section 35F. Consequently, the stay application was dismissed as infructuous. The Tribunal directed the applicant to provide proof of mandatory deposit within a specified timeframe, failing which the appeal would be returned as the Tribunal lacked the authority to entertain it.

This comprehensive analysis of the judgment highlights the key legal issues, interpretations, and decisions made by the Tribunal regarding the appeal and stay application under Section 35F of the Central Excise Act.